We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Coty (COTY) On Track to Simplify Capital Structure With KKR Move
Read MoreHide Full Article
Coty Inc. (COTY - Free Report) is committed toward undertaking initiatives to simplify the balance sheet and reduce the cost of capital to enhance shareholder’s value. Moving on these lines, the company announced the sale of KKR & Co. Inc.’s (KKR - Free Report) 2.4% remaining ownership stake in Coty. The ownership stake was converted into nearly 20 million common shares. Post the completion of the transaction, Coty’s convertible preferred share balance amounts to nearly $146 million, which is held by the company’s chairman of the Board, Peter Harf.
The latest announcement comes after three previous transactions in the last three months, resulting in KKR’s complete exit from Coty. The transaction will result in further simplification of Coty’s capital structure while generating incremental yearly dividend cash savings of almost $11 million. Adding the annual cash savings from the past three sales by KKR, the savings go up to $77 million. Management expects the sale to be slightly accretive to Coty’s fiscal 2022 adjusted earnings per share (EPS). That said, its fiscal 2022 adjusted EPS projection in the range of 19 cents to 23 cents remains unchanged.
Image Source: Zacks Investment Research
What Else is Backing Coty’s Growth?
Coty has made several strategic partnerships to enhance its brand portfolio. On Sep 27, 2021, the company entered into a multi-channel agreement with Perfect Corp. — a well-known beauty tech solutions provider. The partnership will help Coty’s customers to shop in the most convenient and personalized manner both online and offline. On Mar 3, 2021, Coty signed a letter of intent to partner with LanzaTech — a pioneer in producing next-generation green and sustainable ingredients. This partnership is aimed at introducing sustainable ethanol produced from captured-carbon emissions into Coty’s fragrance offerings.
Coty relaunched Kylie Cosmetics formulated using clean and vegan ingredients with a revamped packaging. The Kylie Cosmetics line along with the new-integrated website was rolled out on Jul 15, 2021. Management, in its first-quarter fiscal 2022 earnings call, highlighted that it is encouraged with the performance of Kylie cosmetics across channels and geographies since its relaunch.
Coming back to Coty, management is focused on its long-term strategy (unveiled on April 23), which was highlighted by six priorities toward sustainable growth. These include stabilizing the Consumer Beauty make-up brands and mass fragrances; accelerating luxury fragrances and setting up Coty as a core player in prestige make-up and establishing a skincare portfolio among others.
Meat product’s company Tyson Foods, Inc. (TSN - Free Report) sports a Zacks Rank #1. TSN has an expected EPS growth rate of 7.5% for three-five years.
Tyson Foods has a trailing four-quarter earnings surprise of 38.4%, on average. The Zacks Consensus Estimate for its current financial year earnings per share has improved almost 3% in the past 30 days. Shares of Tyson Foods have jumped 28.1% year-to-date.
Helen of Troy Limited (HELE - Free Report) , which develops, markets and distributes consumer products globally, carries a Zacks Rank #2 (Buy). HELE has an expected EPS growth rate of 8% for three-five years.
Helen of Troy has a trailing four-quarter earnings surprise of 19.8%, on average. The company delivered an earnings surprise of 24.4% in the last reported quarter. Shares of Helen of Troy have increased 6.6% so far this year.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Coty (COTY) On Track to Simplify Capital Structure With KKR Move
Coty Inc. (COTY - Free Report) is committed toward undertaking initiatives to simplify the balance sheet and reduce the cost of capital to enhance shareholder’s value. Moving on these lines, the company announced the sale of KKR & Co. Inc.’s (KKR - Free Report) 2.4% remaining ownership stake in Coty. The ownership stake was converted into nearly 20 million common shares. Post the completion of the transaction, Coty’s convertible preferred share balance amounts to nearly $146 million, which is held by the company’s chairman of the Board, Peter Harf.
The latest announcement comes after three previous transactions in the last three months, resulting in KKR’s complete exit from Coty. The transaction will result in further simplification of Coty’s capital structure while generating incremental yearly dividend cash savings of almost $11 million. Adding the annual cash savings from the past three sales by KKR, the savings go up to $77 million. Management expects the sale to be slightly accretive to Coty’s fiscal 2022 adjusted earnings per share (EPS). That said, its fiscal 2022 adjusted EPS projection in the range of 19 cents to 23 cents remains unchanged.
What Else is Backing Coty’s Growth?
Coty has made several strategic partnerships to enhance its brand portfolio. On Sep 27, 2021, the company entered into a multi-channel agreement with Perfect Corp. — a well-known beauty tech solutions provider. The partnership will help Coty’s customers to shop in the most convenient and personalized manner both online and offline. On Mar 3, 2021, Coty signed a letter of intent to partner with LanzaTech — a pioneer in producing next-generation green and sustainable ingredients. This partnership is aimed at introducing sustainable ethanol produced from captured-carbon emissions into Coty’s fragrance offerings.
Coty relaunched Kylie Cosmetics formulated using clean and vegan ingredients with a revamped packaging. The Kylie Cosmetics line along with the new-integrated website was rolled out on Jul 15, 2021. Management, in its first-quarter fiscal 2022 earnings call, highlighted that it is encouraged with the performance of Kylie cosmetics across channels and geographies since its relaunch.
Coming back to Coty, management is focused on its long-term strategy (unveiled on April 23), which was highlighted by six priorities toward sustainable growth. These include stabilizing the Consumer Beauty make-up brands and mass fragrances; accelerating luxury fragrances and setting up Coty as a core player in prestige make-up and establishing a skincare portfolio among others.
Shares of this Zacks Rank #3 (Hold) company have increased 49.1% so far this year against the industry’s decline of 0.1%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Better Ranked Staple Stocks to Consider
Meat product’s company Tyson Foods, Inc. (TSN - Free Report) sports a Zacks Rank #1. TSN has an expected EPS growth rate of 7.5% for three-five years.
Tyson Foods has a trailing four-quarter earnings surprise of 38.4%, on average. The Zacks Consensus Estimate for its current financial year earnings per share has improved almost 3% in the past 30 days. Shares of Tyson Foods have jumped 28.1% year-to-date.
Helen of Troy Limited (HELE - Free Report) , which develops, markets and distributes consumer products globally, carries a Zacks Rank #2 (Buy). HELE has an expected EPS growth rate of 8% for three-five years.
Helen of Troy has a trailing four-quarter earnings surprise of 19.8%, on average. The company delivered an earnings surprise of 24.4% in the last reported quarter. Shares of Helen of Troy have increased 6.6% so far this year.